Tuesday, December 16, 2008
Arthur Blank and Bernie Marcus founded Home Depot in 1978 after having both spent time as regional managers in another hardware store chain, Handy Dan Hardware. It has been reported that Blank left Handy Dan after a disagreement with management. I’m not sure what the disagreement was over, but given Blank’s success since that time and the fact that I’ve never set foot in a Handy Dan Hardware store, I have to believe that they might have been better off listening to Blank.
The particular genius of Home Depot lies in its warehouse concept and its focus on customer support. Blank and Marcus begun by leasing some warehouse spaces from a struggling chain and worked hard to develop the vendor chain necessary to offer the customer a wider variety of products than had previously been available, essentially following the Wal-Mart model. To this model, they added a specialized workforce of individuals with knowledge about the construction and home improvement worlds. This workforce makes the Home Depot warehouses less intimidating to a less informed consumer (like myself), greatly expanding their customer base.
In their book, How a Couple of Regular Guys Grew The Home Depot from Nothing to $30 Billion, Blank tells a story that sums up the Home Depot revolution perfectly.
“In 1981, before we went public, Bernie made speeches locally in the Atlanta area, where we are based. Standing before 400 members of a local Rotary Club, he asked, "How many people consider themselves real do-it-yourselfers?" He described a DIYer as someone who owned power saws, electric drills, etc., or who could change a light fixture. How many, he asked, could repair a toilet themselves rather than call a plumber? "A do-it-yourselfer is somebody who really can do those things," he said.
Out of 400 people, maybe 20 raised their hands.
In 1997, he made another speech to the same group and asked the same question. This time, only 15 out of 450 people did not raise their hands. We had changed America.”
Along the way to “changing America” Blank and Marcus created a company that is still worth nearly $40 billion, despite recent losses in the slumping stock market. Blank has since retired from his position on Home Depot's board and is well known as the owner of the Atlanta Falcons. He is also an active philanthropist and his family foundation has donated millions to community based organizations like Habitat for Humanity. Marcus has also reamined active in the community, having spearheaded the effort to build a world-class aquarium in downtown Atlanta. Marcus also funded and founded The Marcus Institute, a nationally recognized center of excellence for the provision of comprehensive services for children and adolescents with developmental disabilities.
written by Kerry posted at 8:49 AM
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